Nadella, Gates: Right Team For Microsoft?

Does the pairing of Nadella and Gates foretell Microsoft's return to glory or a new era of dysfunction? Take a closer look.

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What will the dynamic be like between new Microsoft CEO Satya Nadella and company founder Bill Gates? Among the myriad unknowns circling Microsoft and its new CEO, Gates's new role as Nadella's adviser is arguably the most important. It speaks to virtually every point of controversy raised as the selection process wore on, from Nadella's autonomy to slay sacred cows, to Gates's influence on company strategy, to the role of consumers in Microsoft's future.

A Wall Street Journal report Wednesday reiterated many of these concerns, citing numerous anonymous sources who said the Microsoft board grew exhausted as months dragged by and eventually chose Nadella after acknowledging that all candidates presented some degree of compromise. Gates's role, which involved his resignation as board chair, was evidently seen as an antidote to Nadella's inexperience with Microsoft's flagship consumer technologies.

"Bill is still a legend and he's going to have something to say," said Gartner analyst David Mitchell Smith in an interview. "It's probably a good thing that [Gates] is out of position to call all the shots [as chairman], but it's also good to have him more involved than he was over the last five years."

When Gates said last month that he would offer Microsoft only part-time help, he seemed to downplay reports that he would take a more active role at the company -- only to pledge Tuesday that he would spend at least a third of his time advising Nadella. Since then, most reactions have run been positive, but they've still run the gamut.

Some have heralded the move as Gates's triumphant, Steve Jobs-like return to the company he founded. David Levin, chief of consulting firm Silicon Valley Ventures and a past Gates associate, told The Telegraph that Gates's new role is tantamount to reclaiming the CEO chair. "You cannot underestimate the importance of this," he said.

"You could read [Gates's role] as the new guy coming in as a weak leader," Forrester analyst James Staten told InformationWeek in an interview -- but he doesn't see it that way. Rather, Staten praised Nadella for building a culture of agility within Microsoft's enterprise and cloud teams.

Staten said Nadella challenged colleagues who were conditioned to 18-month product cycles to deliver constant iterations as often as every week. "It was unheard of in the enterprise server business," Staten remarked. "Nadella had to push people out, overrule people with big businesses."

"Satya has made significant innovations around agility," said Gartner analyst Marv Adrian, who characterized Gates's increased role as a positive.

Apple founder Steve Jobs famously recruited new employees by challenging them to change the world. In his limited remarks so far as CEO, Nadella has channeled a similar tone, with numerous references to the meaning he wants Microsoft employees to find in their work.

Nadella has also sounded like a man eager to demonstrate he knows the challenges before him. Though his statements have eschewed specifics, he's repeatedly said Microsoft will follow a mobile-first, cloud-first strategy, and that the industry demands innovation.

But you'd expect him to say things like that during his first day on the job. Crucially for Microsoft, Nadella, who will start this year with a base salary of

Michael Endler joined InformationWeek as an associate editor in 2012. He previously worked in talent representation in the entertainment industry, as a freelance copywriter and photojournalist, and as a teacher. Michael earned a BA in English from Stanford University in 2005 ... View Full Bio

I think what Michael is getting at in this piece is that Gate and Nadella may be the right combination of founder legitimacy and a disrupter's ability to move the organization. It may not meet Wall Sttreet's definitiopn of what's needed, but if those people actually knew, they'd be as rich as Bill Gates. Nadella does represent change inside an organization that's reluctant to. He may be able to effect more of it in CEO's chair.

Windows 8 is a total disaster and Microsoft will be destroyed by its arrogance

Windows 8 is a total disaster and Microsoft will count nothing in another 6/8 years and will close in 15 years

In the next 3/4 years it will be plain clear.

People are not intersted to strategies and tech discussion. They buy products or not. No one will buy the products of the new Microsoft wave, the one based on the concept of 'one interface for any device' because they are based on an idiotic assumption.

Microsoft is too arrogant to backpedal and this will destroy Microsoft, arrogance.

@Somedude8, The "soft dollar" stuff is usually found in principle by the founding entrepreneur or owner only to be displaced once the founder or private owner sells or leaves. BTW, I'm a good Monday morning QB.

Its amazing how often the Big Boys totally blow it by underestimating the value of certain 'soft dollar' investments. If its not a hard ROI, it gets cut. Fast forward a couple years, the company is floundering, and they don't understand why. Of course this is a whole lot easier to spot from the sidelines!

This kind of reminds me of Michel Dell's history. He started the company built it up then turned it over to a money management type that proceeded to run the company into the ground pinching every penny possible. Dell returned, briefly restoring business only to end up making the same poor penny pinching mistakes. This looks like the same is happening at Microsoft however Nadella is the wild card. My guess is that penny pinching will still win out over customer satisfaction with competitive products and prices.

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